Commentary: Daniels, IEDC burning things up

My friends at Crain’s Chicago Business have published several stories about the state of Indiana’s economic development efforts since Gov. Mitch Daniels took office and launched the Indiana Economic Development Corp. in 2005.

They never used to write much about Indiana.

In June that year, an Illinois economic development official was quoted in Crain’s saying, “It seems like every time I turn around on a project along Interstate 80, there’s Indiana breathing down my neck.” A year later, a guest columnist acknowledged Indiana’s competitive edge over Illinois in the wake of Honda Motor Co.’s decision to locate its new $550 million assembly plant in Decatur County. At our trade association meetings, my friends have asked, “What’s going on down there [in Indiana]?” Windy City journalists aren’t the only ones taking notice. Check out the following: A 2007 IBM study ranked Indiana No. 1 in North America in the creation of production jobs through foreign investment in 2006 (think Honda, Toyota, Nestle and Rolls-Royce); Forbes magazine and the Milken Institute ranked Indiana No. 1 in the Midwest for the lowest cost of doing business. Forbes added that the Hoosier state was No. 4 in the nation; The Tax Foundation’s 2008 Business Tax Climate Index ranked Indiana No. 1 in the Midwest and No. 12 nationally in its top tax-climate rankings; and, finally, Our state was ranked No. 1 in competitiveness in the Midwest by the 2008 Best States for Business survey in Chief Executive magazine and by the ALEC/Laffer 2007 State Economic Competitive Index. Word is getting around. While some of the foundation for this activity and recognition was in place before the Daniels administration, the last three years have taken economic development to a new level. No doubt about it. During his campaign and his first term, Daniels has emphasized improving the state’s business climate and being aggressive about making deals. On the first score, he and his team have pushed for legislative changes, and the General Assembly has responded. The 2006 and 2007 sessions arguably were the best for business in many years.

They produced a broad range of legislation-from the large, like Major Moves, to the small, like the venture capital tax credit-that has changed the landscape and produced results. Business interests didn’t like the higher property tax cap for commercial properties or a hike in the state sales tax that emerged from the session just ended. Time will tell if their fears are warranted.

On the second score, Daniels put his money where his mouth is by hiring business types to run both the IEDC and key state departments. He gave them all the charge of working “at the speed of business, not government.”

It’s working. IEDC reports that 515 businesses have committed to create 63,215 jobs and invest nearly $15 billion in their Indiana operations since January 2005.

The 2005 number of jobs is twice that of the previous year. In 2004, Indiana added 8,519 jobs; in ’05, 15,407; in ’06, 21,995; and in ’07, 22,627, according to IEDC’s numbers. Nice trend.

It’s important to note that these new jobs are being spread around the state and nearly half are going to small towns and rural communities, many of which are suffering through serious economic difficulties and need the jobs the most.

The question is, can we sustain the momentum?

My boss, Mickey Maurer, who ran the IEDC in 2005 and 2006, tells me his successor, Nate Feltman, has picked up the ball and is running with it. The numbers would seem to bear that out.

IEDC reports that, year-to-date through March 2008, it has secured 32 new projects, adding 3,500 new jobs and a capital investment of $656 million. For the same period last year, there were 30 projects, 2,950 jobs and $498 million in capital investment.

Seems we’ve got the right people driving this bus.